s tat e p rofile
Bulgaria state proﬁle fact sheet
Annex C .Romania state proﬁle fact sheet
Annex B .SWOT Analysis of Transition in Romania
2 3 4 6 7 7 9 11 12 13 14
.Table of Contents
Annex A .
Italians. Romania noticed increasing amounts of foreign investment and became sigle largest investment destination in Southeastern and Central Europe. Romania is governed on the basis of multi-party democratic system and of the segregation of the legal. Bulgaria by river Danube (south) and Ukraine and Moldova (north).6%) and Roma/Gypsies (2%). Slovaks. modern Romanian culture emerged under a strong inﬂuence from French and German culture. (2007). London and New York: Routledge. Romania has access to Black Sea.056 citizens . After the bloody fall of dictator Ceausescu.4% of population2 . Lipovans. Croats. Romania is also a member of World Trade Organisation and International Monetary Fund. Tatars. However it cannot be included in any of them. Romania leaded by Ion Illiescu. The largest ethnic minorities are Hungarians (6. Moreover. Germans. Since 1989 Romania changed political orientation to West. Since 2000. Greeks. where executive functions are shared between the president and the prime minister.X. and also a biggest city in country is Bucarest. It joined the North Atlantic Treaty Organisation in 2004 and the EU in 2004. Armenians. Romania has one of the biggest rate of employment in agriculture sector . Poles.89.almost 32% of population. Turks. as well as other groups account for 1. Serbs. Ukrainians. In 2005. Capitol city.1991).5% of all are Romanians. According to latest census in Romania are 22. 3734-3759
Ofﬁcial Romania Census 2002
Romania is situated in south-east part of Europe. Romania is deﬁned as the meeting point of three regions: Central Europe. restored civil order. Romania is semi-presidential democratic republic. Czechs.276. Jews. Bulgarians. government of
1 “Romania". The constitution of Romania is based on Constitution of France’s Fifth Republic1 (approved 8. because Romanian identity was formed partly on mixed Roman and Dacian elements. Has borders with Hungary and Serbia (west). The Europa World Year Book (48) 2. Russians. executive and judicial powers. The economy is essentially based on services (55% of GDP) with serious contribution of industry (35%) and agriculture (10%). Eastern Europe and the Balkans.
Gheorghiu Dej. Negotiations were started in 2000 and were completed in 2004. Parliamentary and presidential elections were held in May 1990. The grip of the Ceausescu clan on Romania's economy and polity ended with a coup in December 1989. A new constitution was adopted in 1991. The head of state is the president. Romania fell under full communist control at the end of 1947. The ruling coalition was formed from Conservative Party.Romania change progressive tax system with ﬂat 16% tax for personal income and corporate proﬁt. Calin Popescu Tariceanu of PNL became prime minister 3. The split widened under Nicolae Ceausescu. comprising 40 counties and the municipality of Bucharest. the Democratic Party (DP). comprising the National Liberal Party (NLP). After the November 2004 general election a fourparty coalition government was formed. The Senate (the upper house) has 137 seats and the Chamber of Deputies (the lower house) 332. page 2
. Romania’s government made lot of efforts in order to fulﬁll the standards and requirements of EU accession. embraced Stalinism. currently Traian Basescu. no party captured a majority. Romania applied to join European Union in 1995. who will serve a ﬁve-year term. The most recent elections took place in November 2004. In September 2006. leaving it without a parliamentary majority. Both chambers are directly elected for a four-year term from 41 multi-member constituencies.
Romania operates a bicameral parliamentary system. 2007. and this was revised in 2003.Romania. Throughout 2005 and 2006. The communist leader. The CP withdrew from the government in December 2006. the EU approved Romania’s entry and accession was scheduled for January 1.for example: speed up the reform of the judiciary and eradicate
Freedom House Report . Although the PSD party secured the most seats in the parliamentary selections. the ruling coalition was rather unstable. formerly the Romanian Humanist Party) and the Hungarian Democratic Union in Romania (HDUR). but gradually proceeded to loosen Romania's ties with the Soviet Union. and the DP was ousted in April 2007. the Conservative Party (CP. who took over as party general secretary in 1965. Trajan Basescu of the Alliance for Truth and Justice became a president. Union of Hungarians in Romania and National Liberal Party.
The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets.7% in 2006. some progress has become evident .the government created the agency to prevent human trafﬁcking with the goal of evaluating antitrafﬁcking efforts and providing help to victims4 . However. The recovery in 2006 reﬂected stronger growth of private consumption and investment. but accelerated again to 7.Romania.Romania fact sheet 2007 (including graphs)
.1% in 2005 from a record rate 8. wich rose by 12.6% respectively in the three quarters on year-on-year basis’
Freedom House Report . However. Despite the global slowdown in 2001-02. while corruption slowing down business environment. page 3 EBRD Report .4% in 2004.corruption including review of the Civil and Criminal Codes. decrease in pending cases before civil section of the High Court and improvements in recruitment procedures for judges. and consumption have kept GDP growth above 4%. The constitution guarantees women equal rights.4 and 15. strong domestic activity in construction. macroeconomic gains have only recently started to spur creation of a middle class and address Romania's widespread poverty. showing signs of overheating. but gender discrimination is a problem in the same way like in te rest of Central East Europe. One the major problem is trafﬁcking of women and girls for the purpose of forced prostitution. agriculture. The EBRD report5 indicates: ‘Real growth slowed down to 4. The constitution accepted in 1991 provides a representation to each national minority that passes a threshold lower than 5% needed to enter Parliament.
Agriculture in Romania is stil very important area of human activity (32% of population is employed in agriculture sector). cereal culture has remained preponderant.1 70. but future FDI ﬂows are hard to predict.9
76.HERITAGE. Bulgaria (further comparisons in next parts of this essay) and add two extremely different. growing plants activities has been diversiﬁed. but generally connected with CEE and EE: Slovenia and Albania.2 61. Bulgaria (the poorest country in EU) and even Albania ( one of poorest country on Earth) get better marks. but overall score is much worser because of corruption and lacks in property freedom. I decided to compare four countries: Romania. There have been
74. It has good notes in business and trade freedom.2 74
H E R I TAG E F U N DAT I O N & W A L L S T R E E T JOURNAL HT TP://WWW.2 66.6 60. Although since the second world war. Index of Economic Freedom 2007 shows very interesting data. mainly because these numbers are linked to privatisation of the Commercial Bank of Romania in 2006.9 56.FDI (Foreign Direct Investment) covered 83% of the external deﬁcit.6 62. The biggest surprise is the worst place of Romania.4 61.
INDEX C O U N T RY
OF ECONOMIC FREEDOM
S L O V E N I A 58 B U L G A R I A 62 A L B A N I A 66 R O M A N I A 67
63.8 63. Moreover.
1%).ro/romania/en/economie/econ2002.9%). Germany (15. chemical industry and related industrial goods (7. Austria (3%).1).ici. Hungry (3. mineral products (14. Turkey (4%). Holland (3. Great Britain (3. An important place is taken by viticulture (with famous vineyards and wines) and fruit crops. Russian Confederation (7.added industrial plants such as sunﬂower.8%). Greece (2. However.3%). mechanical machines and outﬁts.2%). Regarding exports.7).2%) and Austria (2.8% to the countries of European Union) and 65. registration or sound and image reproduction machines (14.4) 6.4% (67. white beet. In 2001.
Romania is known as a major “crossroad” for international economic exchange in Europe.html
. Another ﬁve types of goods cover almost 70% of the total amount of imports: mechanical machines and outﬁts. the transportation infrastructure doesn’t meet expectations of western Europe markets.8%).1%). At the end of 2001 livestock balance (thousand heads) was the following: cattle (2815. footwear and similar products (8. Italy (19. Hungry (3. registration or sound and image reproduction machines (22. the percentage of developed countries from the total Romanian exports was more than 74.4%). swine (4491.4%).1%).6%) and mineral products (6.5%). France (6. electric equipments. almost 70% of the total amount is taken by ﬁve types of goods: textile (26. textile fabrics and articles made of these (16. potatoes and vegetables. Germany (15. • 6-8th place for grapes and wines.8%) as import partners.2%).1% (57. sheep and goats (7805. USA (3. Romania's main commercial partners are: Italy (24.3% for the countries of European Union) regarding import's value. Great Britain (5. Romania ranks well in Europe and in the world in terms of several agricultural products: • 9th place in the world (2nd in Europe) for maize.3%).9%).8%) as export partners.9%). USA (3. electric equipments.9%). • 8th place (5th in Europe) for sunﬂower.7%).6%).6%).2%). France (8.
In spite of many differences concerning culture. For more information please see Annex A. The percentage of computers connected to the internet reaches almost 70%. Moreover. Romania currently ranks 49th out of 175 economies in the ease of doing business.religious groups can only receive ofﬁcial registration if they have at least 20 000 members.U. According to the census from year 2002. religion or international relations.R.7%). The combined total transportation by rail constituted around 45% of all passenger and freight movement in the country.World Bank estimates that the railway network in Romania ist fourth largest in Europe.
World Bank Report 2006 C.recensamant. Other religions include Roman Catholicism (4. On December 27. 2006. according to World Travel and Tourism Council Romania is the fourth fastest growing country in the world in terms of travel and tourism. Romanian High Technology Development
9 Ofﬁcial site of the results of the 2002 Census (http://www. the domestic and international tourism generated about 4.html)
. Parliament of Romania passed new Law on Religion . it is worth to compare them.8
The dominant religious body in Romania is Romanian Orthodox Church. Romania is the 10th country in the world with a bigger percentage of people connected to the Internet than the USA.8% of GDP and almost 6% of total jobs. tourism is the second largest (and the most dynamic and fastest developing) component of the services sector.1% of Romania’s total population. Following commerce. or about 0. In 2006. According to a World Bank report. Protestantism (3.7%) and Romanian Greek-Catholic Church (1%)9. scoring higher than other countries in the region such as Hungary.
Romania is one of the strongest country in the region. it gather almost 87% of population.ro/pagini/rezultate. Poll.S. Poland or Czech Republic7 . It was included to European Union together with other quite similar in case of economy country: Bulgaria.
in some way continuing the fame of research instruments used for the Soviet space programme.between 11 and 12 thousands of dollars. the level of telecommunication development in both of compared countries is very high (even higher than in Central European members of EU)10. it has bigger rate of foreign direct investment (FDI) Summarize these data we can say that Romania and Bulgaria are generally at the same level of development (the date of UE accession is the same too) and they are good examples to compare and ﬁnd signiﬁant differences between them. in case of demographics are rather unitary.bg/Census/Ethnos. like Romania. and it is predicted. the GDP (PPP) per capita is almost on the same level . Almost 85% of Bulgarian have cellular phone. Both of countries. for example.7 per woman12. is considered the one of main “crossroads” of Europe. Minorities are no more than 15% of population.4 children per woman as of 2007. the countries has served as a major passage between Europe. Even if Romania has almost two times bigger area and three times bigger population.nsi. The same situation we can ﬁnd in Romania. it has fertility rates of 1. In other hand: Romania has smaller than Bulgaria public debt and unemployment rate. Low fertility rate. in country are near 185. Bulgaria has slightly better HDI (Human Development Index) and visibly better situation with people under poverty line (10% difference). low
10 http://www. but surprisingly. in 2050 it will be 1. Bulgaria. In the recent years Bulgaria has had one the slowest population growth rates in the world. Moreover. During Cold War. Bulgaria was known as one the major innovator in pharmaceutical and serial computer development research centre in East Europe. Bulgaria and Romania are known as the poorest EU member countries. Since ancient times.000 Internet providers11.com/wfbcurrent/bulgaria/bulgaria_communica
12 National Statistical Institute of Bulgaria (http://www.htm)
.theodora. Bulgaria is spending lots of efforts to change image of country to friendly for international science and technology facilities. Asia and Africa.In case of quick look into statistical data please compare Annex A and Annex B.
Increased investment ratio after EU accession. Every move to heal economy or international relations could by used by opposition in populistic way (and there was not difference which party won elections before .837% Bulgaria). riots. But Romania and especially Bulgaria are the most signiﬁcant examples of transition of countries and nations. when transition will be started. Unstable situation. the sustainability of the external deﬁcit and the loss of competitiveness13. The real problem of Romania economy is appreciation of the currency.populism was common element in politics) A D VA N TA G E S Stability (economical) Investments (higher FDI) Restructurisation. It was only matter of time.birth rate per 1000 population and much higher death rate causing population growth under zero (exactly -0. Transition results are controversial.127% Romania. In almost every nation in transition we can observe rapidly decreasing population growth rate. ways. because it was needed to start recovery from previous system. ERBD country factsheet
. privatisation and restructurisation of industry will help to keep one of the biggest in modern Europe level of economic growth. privatisation New markets Stronger political alliances For more detailed analysis please see Annex C. rather negative. Shrinking population is the main obstacle in their route to met the goal of being seen in political map of the world. all the time changing political arena is inﬂuencing lives of ordinary people in many. But during these processes any change of status quo was recognized by nation as betrayal of political class. D I S A D VA N TA G E S Higher poverty during transition Bigger economical gap Critical population growth rate Relaxation of power
Romania. economic weakness. -0.
• Inﬂationary pressures are expected to remain strong throughout 2008. as forthcoming local and parliamentary elections boost government spending and forestall a more prudent budgetary stance. and inﬂation is expected to average around 4. • Romania will beneﬁt accession into EU. but taking under consideration data gathered during making this essay I can make short list of possibilities: • The annual budget deﬁcit could easily exceed 3% of GDP in 2008-09. but demand growth will slow sharply in 2009.3% in 2009.It is hard to predict the future of Romania. • Imprudent ﬁscal and wages policies will fuel domestic demand and drive up the annual current-account deﬁcit to almost 15% of GDP in 2008.8% in 2007. following estimated growth of 5. once the 2008 election is out of the way. • Strong consumption and investment will result in average real GDP growth of around 5% per year in 2008-09. but only in limited areas mainly because of high corruption rates • Infrastructure will be strongly modernised due to EU expectations • The rate of population employed in agriculture will be declining very quickly
“Romania".ro/pagini/rezult ate. Rumunia w EU (pl).Romania fact sheet 2007. http://web.economist.R.U. Ofﬁcial Romania Census 2002.bbw. The Europa World Year Book (48) 2.psz.com/ World Bank Country Classiﬁcation: Romania Romanian National Institute of Statistics.htm).sht ml?s=001&p=0023 . London and New York: Routledge.com/wfbcurrent/bu lgaria/bulgaria_communica.com/countries/Ro mania. 3734-3759.amnesty. Poll. Amnesty International reports on Romania.government.ro . http://www.html . http://www.theodora. (2007). Bucharest Business Week. http://www.c fm?Story_ID=E1_RQJNVQJ .economywatch.org/ai.recensamant. Economy Watch.nsi.bg/Census/Ethnos. http://www. http://www. http://www. C.Romania World Bank Report 2006.com/displayStory. http://www. http://www. http://www.pdf .http://www.nsf/countries/r omania . National Statistical Institute of Bulgaria (http://www.insse.bg/fce/index.economist. Romanian High Technology Development.pl/content/view/3797/
.S.aboutromania. Freedom House Report .com/world_ec onomy/romania/index. EBRD Report .html.ro/cms/ﬁles/st atistici/comunicate/pib/pibr06.
coal. timber.10% 25% 18.presidental republic Traian Basescu Calin Popescu.XII. natural gas.1%
January 1.Romania state proﬁle fact sheet
GEOGRAPHY Capital city Area Coastline Natural resources Climate Bucharest 238.5% Roman Catholic 4.056 93/km2 0.1991
Romanian 91% Hungarian 6. iron temparate
ECONOMY GDP (PPP) total per capita Currency Unemployment rate Population below poverty line Public debt $256.Tariceanu 8.9 billion $11.Annex A .276.3% of GDP
P O P U L AT I O N Population Density HDI Religions 22. 2007
.392 km2 225 km petroleum.7% Roma 1.813 Eastern Ortodox 87% Protestant 7.800 Leu 6.5%
POLITICS Government President Prime Minister Constitution Unitary semi.
Annex B .VI.2%
POLITICS Government President Prime Minister Constitution parliamentary democracy Georgi Parvanov Sergei Stanishev 12. 2007
January 1.5% Turkish 9.Bulgaria state proﬁle fact sheet
GEOGRAPHY Capital city Area Coastline Natural resources Climate Sofia 110. copper. lead.910 km2 225 km bauxite.277.6% Roma 4. timber temparate
ECONOMY GDP (PPP) total per capita Currency Unemployment rate Population below poverty line Public debt 92.1991
Bulagrian 84.824 Bulgarian 85% Muslim 12.60% 14.10% 26.2% Christian 1.640 Lev 9.20%
P O P U L AT I O N Population Density HDI Religions 7.856 70/km2 0. zine.559 billion $12. coal.
Growth of wealth in country . position and direction of a country.Strong connections with West . deﬁcit . who led a research project at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. Opportunities.New frailty system .Demography
. Weaknesses. Threats.Stability problems (in ﬁrst steps) . The SWOT analysis headings provide a good framework for reviewing strategy. banks.
.Leader of region
. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.Democratisation
.Accession to international organisations . The technique is credited to Albert Humphrey.Importance in international relations .New markets .Relaxation of power . NGOs etc.SWOT Analysis of Transition in Romania Strengths
.Annex C . national debt.Finances.) .Help from others (countries.“Side effects” of transition
SWOT is an acronym for Strengths.